Company audit is conducted by a qualified Chartered Account, who is appointed as the auditor of the company. Once the audit is complete, the opinion of the auditor is expressed in an Auditor’s Report.
Company audits in India are classified as follows:
All companies irrespective of nature of business or turnover
Classes of companies mentioned under the Companies Act
Independent Chartered Account or a firm of chartered accounts
Independent Chartered Account or a firm of chartered accounts (other than statutory auditor) / Cost accountant / any other professional that the company deems fit
Financial statements and records
Financial statements and other aspects of the company’s activities.
As mentioned in the Act, or on the discretion of the company
Report to the Shareholders as specified under Section 143 of the Act.
Report to the Board of Directors
The purpose of the Statutory Audit is to report the financial status and accounts to the Government and to ensure that the company’s tax liability has been calculated in the manner prescribed by the government.
Statutory audits are conducted every fiscal year, starting April 1, and ending March 31. Statutory Audits are divided into Tax Audits and Company Audits.
Under the provisions of the Companies Act, 2013, every company must have its annual accounts audited, irrespective of its nature of business or turnover. The directors and shareholders of the company will appoint an auditor for this purpose.
Internal audits are a part of the company management to check the health of the company and to check overall organizational efficiency.